VIRGIN RAISES $159M IN AIRLINE DEAL WITH HNA GROUP

Written on the 1 June 2016 by Brisbane Business News

VIRGIN RAISES $159M IN AIRLINE DEAL WITH HNA GROUP

VIRGIN Australia Holdings (ASX: VAH) and China's HNA Aviation Group have inked a new commercial alliance to bolster the carrier's presence within the Chinese travel market.

HNA will make a $159 million equity investment in Virgin Australia in the form of new shares as part of the agreement.

The placement will be issued to subsidiary HNA Innovation for 30 cents apiece, which will boost HNA's total stake in the company to about 13 per cent.

As the airline continues to review its capital structure, HNA has signalled intentions to increase its shareholding to 20 per cent over time.

The Chinese aviation powerhouse will also be nominating a director to the Virgin Australia board under the agreement.

The companies will work to establish direct flights between Australia and China, as well as cooperate on commercial functions including code-sharing, frequent flyer programs, lounge access and promotion of tourism and business travel.

Virgin Australia CEO John Borghetti says the company will invest further into the key market by making the most of its new company ties. 

"We are pleased to welcome HNA as a new shareholder and strategic alliance partner," says Borghetti.

"The alliance will see us leverage the opportunities offered by China as well as the synergies of HNA's comprehensive aviation supply chain."

According to Borghetti, China represents Australia's most valuable inbound travel market, with the total number of inbound passengers increasing by approximately 18 per cent per year since 2010.

The new alliance will be subject to ACCC authorisation, regulatory approvals from Chinese authorities and other commercial conditions before being finalised.

 


Author: Brisbane Business News Connect via: Twitter

Latest News

SIRTEX CEO DISMISSED FOLLOWING SHARE TRADING PROBE

SIRTEX Medical Ltd (ASX: SRX) has sacked its chief executive officer, Gilman Wong (pictured), following an investigat...

SANTA DELIVERS KOGAN A GIFT

KOGAN.COM (ASX: KGN) has exceeded its expectations and reported another strong quarter of trade.

The online retail...

FOUR WAYS YOU SHOULD PROTECT YOUR IT SYSTEMS FROM EXTREME WEATHER

SHANNON Overs, co-founder of onPlatinum ICT, sees it too often, perhaps half a dozen times per year businesses tha...

IOT GROUP ORDERS FIRST PRODUCTION OF ROVA DRONE

IOT Group (ASX:IOT) has ordered production of 40,000 units of the ROVA flying selfie drone from Chinese technologies ...

Related News

RISE OF STARTUP SUPPORT PROGRAMS NOT AS ROSY AT IT SEEMS

ENTREPRENEURIAL cultivation companies in Australia are appearing quickly, but questions have been raised about whe...

SMES TAKE RETAIL MARKET SHARE AS CONSUMERS CHOOSE PERSONALISATION

IN a battle for the hearts and wallets of Australian consumers, it appears that small and medium retail businesses...

KNOWLEDGE WORKERS AMONG MOST SOUGHT AFTER IN 2017

BUSINESSES searching for efficiencies and improved systems are in search of knowledge workers early this year, say...

FEMALE ENTREPRENEURS GET SPRINGBOARD TO GROWTH

DESPITE the fast-growing number of women studying STEM subjects at school and university, women continue to be und...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter